(Corrects title to New York County District Attorney's Officein paragraph 4.)

By Brett Wolf

ST. LOUIS, June 21 (Thomson Reuters Accelus) - Even thoughDutch bank ING Bank Nv agreed last week to forfeit a record $619million for improperly helping Iranians and Cubans evadesanctions by pumping billions of dollars through the U.S.financial system, individual bankers have so far escapedprosecution.

This lack has fueled charges that U.S. and local enforcerswould rather collect fines than punish individual executives,and that doing so can weaken sanctions enforcement. Authorities,however, say proving wrongdoing by individuals in such cases isharder than it seems.

"It seems like the only people the government wants toprosecute are low-level drug dealers who structure cash depositsat banks. They go to jail," said retired Drug EnforcementAdministration agent Bob Mazur. "But institutions that commitmassive crimes to move billions of dollars simply pay fines.Maybe this is considered by the government to be too lucrative arevenue stream to worry about putting people behind bars."

The involvement of the New York County District Attorney'sOffice in the ING case and other sanctions cases raisedparticular concern from former U.S. Treasury Department officialPeter Djinis.

"I continue to be surprised that the Manhattan DistrictAttorney's Office spends years of its office's resources andpersonnel on what is unarguably a federal crime, not a city orstate crime," Djinis said.

"Was the DA's office concerned that the feds could not doan adequate job investigating the violations? Or, perhaps morecynically, was it more concerned that it would not share in thedeep pockets penalty the federal investigation was mostassuredly going to extract from ING?"

ING is just the latest in a long line of internationalbanks that have failed to comply with U.S. anti-moneylaundering, tax and sanctions laws and when caught, simply paidfines totaling billions of dollars, Mazur said. Mazur'sundercover work in the 1980s helped bring down the corrupt Bankof Credit and Commerce International (BCCI), in which topexecutives were successfully prosecuted.

The U.S. Justice Department and New York County AttorneyGeneral's Office, which together have handled many of thehigh-profile sanctions cases, said they will always bringcriminal charges where evidence permits.

"I understand people want to see not just the banks pay alot of money but see individuals prosecuted; I think we allshare that desire, we just have to be mindful that we have tohave legally sufficient evidence to prove the case beyond areasonable doubt," said Adam Kaufmann, chief of the New YorkCounty District Attorney's Office's investigations division.

The agencies' probe of ING found that the bank illegallymoved billions of dollars, linked to parties in Cuba, Iran andother blacklisted countries facing sanctions, through banks inManhattan between the early 1990s and 2007. As in past cases,the agencies will split the $619 million forfeiture.

ING has taken disciplinary action including terminations andforced early retirement against more than 60 employees involvedin the sanctions violations, ING spokeswoman Carolien van derGiessen said in an emailed statement. She declined to providenames or other information about those who were disciplined anddeclined to comment regarding calls for the prosecution of INGemployees.

"STRIPPING"

Among violations the ING probe found, the banksystematically removed references to sanctioned parties fromwire-transfer payment messages, a tactic dubbed "stripping." Thepractice was once a common practice at several major Europeanand British banks.

Documents filed in federal court in Washington include anumber of references to emails in which ING employees were toldto take steps to hide the true identities of U.S.-sanctionedparties to ensure that their transactions cleared the U.S.sanctions net. There has so far been no sign that prosecutorsplan to bring charges against any of the bankers involved in theemail exchanges.

In the BCCI case, Mazur said, several executives includingBCCI President Swaleh Nazvi, were convicted on federal charges.Amjad Awan, who was convicted of money laundering for his workin the bank's Latin America division, ultimately cooperated withprosecutors and offered testimony that helped convict formerPanamanian strongman Manuel Noriega on drug trafficking andmoney laundering charges in 1992.

"That is why you can't just fine crooked bankers," Mazursaid.

In 2009, Swiss banking giant UBS paid a $780 million fine tothe Justice Department as part of an agreement in which itadmitted to fraud and conspiracy in helping about 19,000 wealthyAmericans hide up to $20 billion in secret bank accounts.

But the only UBS banker who was criminally prosecuted wasformer private-banking executive Brad Birkenfeld, whovoluntarily disclosed UBS' misdeeds to the Justice Department in2007.

"The whistleblower went to jail," he said.

In a 2010 deal involving Wachovia Bank, which Wells Fargobought in 2008, Wachovia agreed to pay $160 million as part of aJustice Department money-laundering probe. The probe found thatthe bank's failure to properly guard against money launderinghad allowed drug traffickers to pump large sums through thebank. No bankers were charged.

A former Treasury official, who spoke on condition ofanonymity, said the prosecution of individuals might provide"shock value" to get the attention of some bankers willing tolook the other way to do business linked to drug traffickers,corrupt leaders or sanctioned parties.

Prosecutions would be most appropriate in cases whereevidence suggested that a banker profited personally fromillicit transactions, he said.

DECISION STILL OUT ON ING PROSECUTIONS

The decision is still out on whether any ING bankers willface prosecution, Kaufmann said. The district attorney's officeand Justice Department are still reviewing evidence, he said.

"They're continuing to look at individuals to see whetheranyone can or should be prosecuted and we're helping them lookinto those individuals," he said. "I think the JusticeDepartment will make some determinations as to whether the guiltof anyone can be proven beyond a reasonable doubt."

In international investigations, however, there are some"real life difficulties securing the evidence and securingwitnesses," Kauffman said. He declined to elaborate.

European privacy laws can make it difficult to identifyindividual suspects at foreign financial institutions because,for instance, U.S. prosecutors may be able to obtain onlyredacted documents that do not name individuals who circulateddamning emails, a former Justice Department official said oncondition of anonymity.

Even if adequate evidence is collected, forcing foreignnationals to appear as witnesses in a U.S. courtroom candifficult if not impossible, the source said.

A former federal prosecutor said the comprehensiveness ofany mutual legal assistance treaty, or MLAT, that the U.S.government is party to plays a key role in gathering evidenceduring an international investigation.

"Subpoenas are no good, and you instead need MLATs.Interviews in foreign countries require special authorizationfrom that country and it tends to invite reciprocal treatment ofour financial institutions operating in the foreign country.It's a mix of practical problems and policy," the formerprosecutor said.

Jennifer Shasky Calvery, head of the Asset Forfeiture andMoney Laundering Section in the Justice Department's CriminalDivision, said department policy is to prosecute in anysituation "where we have evidence of criminal wrongdoing byindividuals, in terms of bank secrecy violations or moneylaundering activity, or sanctions violations."

"The fact is sometimes with financial institutions you mighthave a collective knowledge that is sufficient to take actionagainst the financial institution, and shows the wrongdoing ofthe financial institution as a whole, but there might not beevidence of any one person's intent sufficient for prosecution,"she said.

When asked whether the Justice Department plans to pursuecriminal charges against any ING bankers, Shasky Calverydeclined to comment. She said, however, that ING agreed tocooperate with any future Justice Department investigations.

"In every case we're interested in seeing which, if any,individuals may be culpable, so this case is no different inthat regard," she said.

PARTNERSHIP QUESTIONED

Djinis' criticisms of the New York prosecutors' involvementechoed criticisms levied against the office for years under theleadership of former Manhattan District Attorney RobertMorgenthau, who had a reputation for targeting errant financialinstitutions.

ING is the fourth major bank to settle with New York andU.S. authorities over "stripping" information from wiretransfers that would have identified sanctioned parties'involvement. In 2009, Credit Suisse AG agreed to pay a $536million fine and Lloyds TSB Bank Plc agreed to forfeit $350million. Barclays settled in 2010 for $298 million.

Later that year, another Dutch bank, ABN AMRO, settled acase with the Justice Department, agreeing to pay $500 million.

Kaufmann disputed the notion that the Manhattan office is"intruding" in such investigations. He said the office played akey role in the probes and added that it was one of his analystswho uncovered the sanctions violations of Lloyds and CreditSuisse and brought them to the attention of the Treasury andJustice Departments.

"Once you're into a subject matter and you're talking towitnesses, and you're looking at emails, you find more and morecases. So I think it's erroneous to say that we're sort ofintruding into a federal area," Kaufmann said.